Shareholders are the people who own shares in an organization, and profit from the company’s performance. One is able to invest in a variety of ways as a shareholder whether it is a private or public business.

A shareholder can sell their shares to an investor to earn a return. Capital gains are the result of a company’s rising profits. Shareholders can be legal entities or individuals, and they may also be part of a corporation.

There are different kinds of shareholders and their rights and priviliges depend on the type of share. Certain shares are entitled to vote however, others do not. Some shares are also paid dividends in a different manner than others. These rights are defined in the charter of the company or bylaws, as in the state laws.

The most common types of shareholders include common, preferred and institutional. Common shareholders are those who hold the common stock of a corporation. They are entitled to vote and influence corporate decisions and decisions. Dividends are paid out based on the company’s earnings. Preferred shareholders, on the other of the other hand, have priority over common shareholders in terms of dividend distribution. They also have greater rights to assets in the case of liquidation. Institutional shareholders are large corporations like pension funds, mutual funds and hedge funds that control large amounts of shares in the company.